Three years ago I invested in Principal Tax Savings fund, which not performing well. Kindly suggest if I should exit from this fund.
- Shashi Kant Gupta
Principal Tax Savings fund is a one star fund with poor performance since 2008 and has had negative returns over the past three years. The lesson that you can draw from this investment is the importance of fund selection. When choosing a funds to invest in, look for its past performance and performance history.
You can also use the Value Research star rating to select funds which is based on risk-adjusted rating system and acts as the first filter in fund selection. A higher rating indicates good performance and one should ideally look for funds that have consistently carried high ratings. As tax savings funds have a minimum three year lock-in, which you have completed; it will be a good idea to cut your losses and exit this fund and invest in a better performing fund.
This article was originally published on May 04, 2011.
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